How do you track and report your income from YouTube and Twitch?

1 Track your income and expenses

The first step to managing your taxes is to track your income and expenses. You can use accounting software, spreadsheets, or apps to record your revenue and costs. You should keep track of all the money you receive from YouTube or Twitch, such as ad revenue, sponsorships, donations, memberships, and merchandise sales. You should also keep track of all the expenses related to your content creation, such as equipment, software, internet, phone, travel, and education. These expenses are deductible from your taxable income, which can lower your tax bill.

2 Report your income and expenses

The second step to managing your taxes is to report your income and expenses on your tax return. You will need to file a Schedule C (Form 1040) to report your profit or loss from your content creation business. You will also need to file a Schedule SE (Form 1040) to calculate your self-employment tax, which is 15.3% of your net earnings. You may also need to file other forms or schedules depending on your situation, such as Schedule 1 (Form 1040) if you have additional income or adjustments, or Form 1099-NEC if you received more than $600 from a single payer.

3 Pay your self-employment taxes

The third step to managing your taxes is to pay your self-employment taxes. Unlike employees, who have their taxes withheld from their paychecks, self-employed individuals have to pay their taxes themselves. You have to pay both the employer and employee portions of Social Security and Medicare taxes, which add up to 15.3% of your net earnings. You also have to pay income tax on your net earnings, which depends on your tax bracket and deductions. You can use the IRS Tax Withholding Estimator to estimate how much you owe.

4 File your quarterly estimated taxes

The fourth step to managing your taxes is to file your quarterly estimated taxes. If you expect to owe more than $1,000 in taxes for the year, you have to make quarterly payments to the IRS. This helps you avoid underpayment penalties and interest charges. You can use Form 1040-ES to calculate and pay your estimated taxes. The due dates for the quarterly payments are April 15, June 15, September 15, and January 15 of the following year.

5 Save for your tax bill

The fifth step to managing your taxes is to save for your tax bill. You don't want to be caught off guard by a large tax bill at the end of the year. You should set aside a percentage of your income every month to cover your taxes. A good rule of thumb is to save 25% to 30% of your income for taxes. You can use a separate bank account or a savings app to keep your tax money separate from your regular money.

6 Consult a tax professional

The sixth and final step to managing your taxes is to consult a tax professional. Taxes can be complicated and confusing, especially for content creators who have multiple sources of income and expenses. A tax professional can help you optimize your deductions, avoid mistakes, and plan for the future. You can find a qualified tax professional through the IRS Directory of Federal Tax Return Preparers or the National Association of Enrolled Agents.